On 19 April 2015, Telenet announced its intention to purchase the Belgian mobile telecoms operator BASE, currently owned by KPN. BASE is known as the low-cost mobile telecoms service provider in Belgium.
Before its implementation, the transaction has to be cleared by a competition authority, most probably the Belgian Competition Authority ("BCA"), which will assess its impact on the relevant markets.
The BCA will examine whether the post-merger market structure - comprising two major vertically integrated operators (Proximus and Telenet) and a small player, Mobistar - will allow consumers to enjoy the benefits of a competitive market.
Several stakeholders, including the Federal Minister in charge of telecommunications, have already voiced their concerns that the transaction may weaken the position of Mobile Virtual Network Operators (MVNOs) to the detriment of consumers. MVNOs offer mobile telecoms services to consumers through access to the network of mobile network operators (MNOs).
It is likely that the merger clearance is made conditional on Telenet offering remedies/commitments aimed at ensuring the entry into or expansion of the MVNO market.
Last summer, in order to address the European Commission's concerns with regard to the acquisition of the German subsidiary of KPN, Telefónica Deutschland had to commit to sell, before the acquisition was completed, up to 30% of the merged company's network capacity to one or several (up to three) MVNOs in Germany.
The BCA will certainly request the assistance of the sectoral regulator (the Belgian Institute for Postal Services and Telecommunications) to better understand the likely impact of the transaction.
